Budget tips to help you stay on track
Setting up a budget is the first important step towards better financial management – now all you need to do is stick to it! There are four specific actions that will help you stay within your budget and on track to achieving your financial goals.
As with any change of behaviour, the first weeks will require discipline until the new financial habits kick in. Humaniti is here to help you stick to your budget and stay on course to achieve financial wellbeing.
1. Track and trim your expenditure
One of the main reasons people struggle to keep their expenses under control is the failure to accurately track them. Reviewing your expenses on a regular basis provides a clear picture of the main categories of expenditure and better understanding your expenses.
Humaniti can help simplify this process by doing the work for you. When you securely link your bank accounts, the Humaniti app will automatically categorise your expenditure. Review the main categories of expenditure to understand your spending behaviour and habits and, if necessary, trim non-essential outgoings. Cutting back on small recurring expenses such as an extra coffee each day can add up to a decent saving each month.
2. Reduce your reliance on credit
Credit cards can be tempting to use on discretionary expenses, but it’s easy to overspend and rack up unnecessary debt. By paying in cash or using your debit card you have a better chance of staying within your budget as you can only spend what’s available. The process of paying in cash is also a visual reminder of how much an item actually costs and may act as a deterrent. The added bonus of using cash or debit card means you avoid paying interest on those nice-to-have items.
When you link your debit and credit accounts with Humaniti, you will be able to track your spending and learn where you can save. The dashboard view of your monthly expenditure puts the numbers front and centre so you can easily monitor your credit card activity. Another benefit of linking all your accounts is the ability to monitor debt and interest charges. With a clear understanding of your debt, you make a critical step towards building a better financial future.
3. Consider automatic deposits
Personal finance experts recommend thinking ahead to help prepare for unexpected expenses, and to finance significant purchases. The idea of setting up emergency and sinking funds is all about keeping a steady balance of savings to avoid future financial shortfalls.
A great way to ensure you’re saving a portion of your paycheck each month is to establish an automatic deposit into a dedicated emergency fund savings account. With an automated savings plan, your bank will deduct a specified amount on payday – as per your instructions – and divert the funds to your dedicated savings account. Doing this automatically and on a recurring basis removes the temptation to spend beyond your budget.
4. Minimise debt
With the proliferation of ‘buy now pay later’ services, it can be tempting to make purchases without thinking through the financial repercussions. If you need to borrow money to finance a purchase, a simple rule of financial discipline is to stop and ask yourself if you really need the item right now. Delaying the decision to purchase can help prevent the problem of having to pay for the debt you’ve incurred down the track. Consider paying by cash or debit card and spending your own money rather than borrowing to spend.
Humaniti can help you stick to your budget by surfacing the key information you need to help keep your expenses in check and be more disciplined about unnecessary spending. The more money you can save and invest today, the better your chances of creating a brighter financial future.
* Disclaimer – the information in this post is general only and does not constitute financial advice.